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Originally published October 21, 2008 at 12:00 AM | Page modified December 4, 2008 at 2:22 PM

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Boeing, SPEEA will tussle over outsourcing

As Boeing and its engineering union prepare to sit down next Tuesday for intensive contract talks, the perennially contentious issue of outsourcing looms alongside the bread-and-butter questions of pay and benefits.

Seattle Times aerospace reporter

Mike Denton

VICE PRESIDENT ENGINEERING, BOEING COMMERCIAL AIRPLANES. The chief liaison between Boeing executive management and the technical work force.

Personal: Age 53. Widowed, with one grown son.

Education: Bachelor of science, electrical engineering, University of Colorado. Masters in business administration, Seattle University.

Career: Joined Boeing in 1977 straight out of college, working as an electrical-systems design engineer. A member of SPEEA before joining management in 1988. He was chief project engineer on the 777 and also on the 737 Classic.

Source: Denton

Ray Goforth

EXECUTIVE DIRECTOR OF SPEEA, the Society of Professional Engineering Employees in Aerospace, since January. Represents more than 24,000 engineers at Boeing, Spirit AeroSystems, Triumph Composite Systems, and BAE Systems.

Personal: Age 40. Married with three young kids.

Education: Bachelor's degree in political economy, Evergreen State College. Law degree, University of Washington.

Career: Worked in social-service agencies with homeless teenagers after moving to Seattle from Los Angeles, then went to college. For 10 years, he served with Local 17 of the International Federation of Professional and Technical Engineers union, which represents local government workers. He served as a contract negotiator and as strategic adviser.

Source: Goforth

As Boeing and its engineering union prepare to sit down next Tuesday for intensive contract talks, the perennially contentious issue of outsourcing looms alongside the bread-and-butter questions of pay and benefits.

Boeing's technical work force, much like the striking Machinists, is anxious over the global-partner strategy used on the 787 Dreamliner as well as the hiring of thousands of non-Boeing engineering contractors for in-house work.

Ray Goforth, executive director of the Society of Professional Engineering Employees in Aerospace (SPEEA), says the 787 outsourcing has produced program delays unprecedented in Boeing history and has fueled "disdain for corporate management."

"We want to make sure they never make this disastrous decision again," said Goforth, "We would like the professional and technical community to have a serious say in how future production systems are set up."

Across from Goforth when main-table talks begin next week at the SeaTac Doubletree Hotel will be Mike Denton, vice president of engineering for Boeing Commercial Airplanes.

Denton won't promise the union a say in organizing future programs but says Boeing will address the errors it's made in the Dreamliner's design and production. On its next plane after the 787, Denton said, Boeing plans to keep in-house some of the major work.

Ahead of the talks, the two negotiators have opposite perceptions of the mood of the technical work force.

The Machinist union has been on strike against Boeing for more than six weeks. And the looming recession must give pause to anyone who contemplates forgoing a paycheck.

Yet Goforth puts the chance of avoiding a white-collar strike at no better than 50-50.

He says preliminary talks in the past few months have gone badly.

Goforth complains Boeing officials have not engaged in genuine discussion, instead rejecting union proposals out of hand, which he said will infuriate his members.

"If [management] don't understand that, they are fools. They know nothing about collective bargaining," said Goforth. "And they will lead this membership to a strike that is absolutely unnecessary."

But Denton sees an engineering work force with restored morale and a renewed faith in the company.

He says that in 2000 — when the union had its first and only extended strike — many employees feared Boeing was on its way out of the commercial-jet business.

"Today, people don't doubt that we have a future," said Denton.

Denton said that in meetings with his engineers he doesn't detect the heightened anxiety he hears from Goforth and other SPEEA officials. "I truly hope they are wrong."

The union represents some 21,000 engineers and technical staff — mostly in the Puget Sound region, with a few hundred in Oregon, Utah and California — who design, engineer and integrate new aircraft and military systems.

Boeing engineers earn on average almost $89,000 a year in base salary, and technical staff average about $67,000, according to SPEEA. Overtime and incentive pay increase those averages to $108,000 and $82,000, respectively, according to Boeing.

Engineers ignored

Goforth, 40, has a youthful vigor and charisma. With a rakish twinkle in his eye, he rattles off energetic threats to Boeing with machine-gun delivery.

Goforth grew up "working poor" in Los Angeles, built an early career in social services, then went to law school. He worked his way up to a job in Seattle as strategic adviser with a local government employees union.

Goforth took the top staff job at SPEEA at the start of this year. A month later, he signaled a startling new SPEEA militancy when he warned union members they should begin to save for a possible strike. At that stage, preliminary talks had barely begun.

He says technical workers' frustration with Boeing's executive leadership is "the culmination of years of being ignored, of having their experience discounted and of having to clean up the messes."

The design work done by Boeing's partners on the 787 or by Russian engineers at Boeing's design center in Moscow often "comes back all screwed up," he said, and his members must work constant overtime to fix the problems.

And he says Boeing's use of a few thousand nonunion contractors to do in-house engineering work will leave the company ill-equipped to recover on future jet projects.

"What happens when the next program runs into development problems? They won't have the internal capacity to dip into to fix it," said Goforth.

SPEEA is proposing restrictions on Boeing's use of contractors to do engineering work. And Goforth will push the broader demand for more say in how future airplanes are designed and built, even though it's unclear how exactly that might be incorporated into the contract.

Boeing as family

Denton, 53, a 31-year technical veteran of Boeing Commercial Airplanes, was a SPEEA member before joining the management ranks in 1988. Now Boeing's chief liaison between the executive leadership and the technical staff, he says, "I think of the engineers as my team."

His father flew Air Force bombers in World War II and the Korean War, and was briefly a pilot for United, says Denton, so "aviation is sort of in my blood."

Denton said Boeing has hired so many contract engineers to avoid pitching union members into a roller-coaster "hire-and-fire cycle."

When the 787, the 747-8 and the 777 freighter all finally start production, there'll likely be a lag of some years when fewer design engineers are needed. Boeing can let the contractors go and keep its core technical team, he said.

He defends Boeing's use of about 1,250 engineers in Moscow, most of them contractors. A good relationship with Russia helps sell jets there, provides crucial access to titanium and helps in negotiating polar flyover routes for airlines, he says.

And he believes work-force morale is far better than at the time of the SPEEA strike in 2000.

Denton recalled the "depressing environment" at Boeing then: Executives had halted several new airplanedevelopent programs, and then-company President Harry Stonecipher hit a nerve when he pushed for a profit-driven approach to replace what he called Boeing's "family" culture.

Today, Denton said, "a lot of those wounds are healed," because Boeing has combined "the good of Harry's message with the good of the traditional Boeing culture."

"I'm not shy of talking about family," he says, but "you have to recognize, too, that you are in business."

He concedes the outsourcing of the detailed design of major parts of the 787 — Mitsubishi of Japan does the wing, for example — has become a major issue for the technical work force as the program has faced major delays.

"Some would have preferred doing that design work," said Denton. "The fact that they are having to fix it later is doubly irritating."

But Denton said that as a result of the lessons learned on the 787, Boeing is likely to keep in-house "some part of major production" on the next airplane.

"We want to be on the leading edge of technology," he said. "Whether it's all of a wing, or all of the fuselage, or some [other] part of production — all of that is to be figured out. But that's the general direction we will go."

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Information in this article, originally published October 21, 2008, was corrected October 21, 2008 and December 4, 2008. A previous version of this story incorrectly stated that Mike Denton "defends Boeing's use of about 2,000 engineers in Moscow, most of them contractors." The number was incorrect, and should have been 1,250 engineers. Ray Goforth, executive director of Boeing's white-collar union SPEEA, and his sister were the first generation in his family to get four-year college degrees. A previous version of this story incorrectly reported that he was the first in his family to go to college. But his father, also called Ray Goforth, earned a two-year associate's degree.

Copyright © 2008 The Seattle Times Company

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